A former New Jersey financial advisor who was found to have defrauded military Gold Star families out of millions of dollars has been barred from the industry, according to Financial Advisor.
The Securities and Exchange Commission took the action against 42-year-old Caz Craffey (aka Carz Levinski Craffey) of Colts Neck. According to the SEC, Craffey was charged with securities violations by engaging in unauthorized trading in customer accounts and recommending excessive trades and high-risk strategies that did not match customers’ investment profiles.
The alleged actions took place between May 2018 and November 2022, at a time when Craffey was permitted to provide general financial education to service members’ families through his job as a U.S. Army financial counselor.
“Craffey directed grieving family members to transfer their benefits into brokerage accounts he managed while working full-time for private brokerage firms,” the SEC stated. “Once the funds were transferred, Craffey allegedly engaged in unauthorized and excessive trading that exposed his customers to higher risks of loss, resulting in realized losses of approximately $1.79 million, including approximately $1.64 million in fees and commissions, most of which were paid to Craffey personally.” The SEC said Craffey’s fraudulent actions resulted in him obtaining more than $9.9 million from the military families.
In detailing Craffey’s unauthorized trading, the SEC said he implicitly recommended transactions in customer accounts without having a reasonable basis to believe the recommendations were not excessive when taken together in light of the customers’ investment profiles. The commission added that he “implicitly recommended trades in certain customer accounts that resulted in the accounts being highly concentrated in one or a small number of corporate-issuer stocks, which were not in the best interest of those customers in light of their investment profiles.”
The Department of Justice said Craffey admitted to encouraging the Gold Star families to invest their survivor benefits in investment accounts that he managed in his outside employment, and that based upon his.false representations and omissions, the vast majority of the families mistakenly believed that Craffey’s management of their money was done on behalf of and with the Army’s authorization. A Gold Star family is one that has lost an immediate family member who died serving in the U.S. Armed Forces.
Craffey pleaded guilty in April 2024 to an indictment that included six counts of wire fraud and one count each of securities fraud, making false statements in a loan application, committing acts affecting a personal financial interest, and making false statements to a federal agency. He was sentenced to 151 months in prison and was ordered to make $4 million in restitution payments.
Under the SEC’s order, Craffey is barred from associating with any broker, dealer, RIA, or other regulated financial entities, and is also prohibited from participating in any penny stock offerings. Any possible future application for reentry into the industry would be subject to strict regulatory scrutiny and conditions.
The attorneys at Hyman Cotter PC have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a no-cost evaluation of your matter.
